Press Conference by SUZUKI Shunichi, Minister of Finance and Minister of State for Financial Services

(Excerpt)

(Tuesday, September 26, 2023, 11:03 am to 11:24 am)

Q.

Let me ask about a policyholder protection issue that you often mention. I suppose policyholders could determine themselves whether their insurance contract is fair and appropriate by examining how many irregularities for which reports were required and what action they have taken to address them. I made an inquiry at the Insurance Business Division about irregularities Sompo Japan and BIGMOTOR had been involved in over the past five years. The Division answered there are concerns that an assertion of whether any document about the issue exists or not itself might damage a specific company, infringing their rights, competitive position, and other legitimate interests, a reply with the greatest consideration for insurers.
So, let me ask two questions. If a company is aware of their social responsibility when having found any irregularity they are obliged to report, they will work to prevent any similar event from taking place. So, why does the FSA concern that insurers may behave in an uncooperative manner? Do you share the same thought?
The other question is about the reply from the Insurance Business Division. The viewpoint of policyholder protection is completely absent from their reply. When an insurer or an insurance agency hesitates to reveal any negative information about themselves, the FSA should disclose it in their place. It is a role the FSA should have to play as a public body. When they even decline to disclose the number of reported irregularities, what could they do to protect policyholders? Would you please let us know what you think about that?

A.

First, let me talk about the position of the FSA. When requested to disclose any administrative document, the FSA decides whether it should be disclosed or not according to the law concerning the disclosure of information held by administrative agencies. The FSA must act according to the law.
Reports of irregularities, which you have mentioned, are submitted according to the Insurance Business Act. There are concerns that a disclosure of what a report contains and how many reports an insurer have submitted may harm their interests, leading the financial institution to behave in an uncooperative or negative manner in filing a report and making notification, and bringing difficulties to the supervisory authority in ascertaining actual facts. So, in principle, we refrain from disclosing such information, including whether any document exists in the first place.
Meanwhile, for instance, an entity itself makes public what its report of irregularity contains and how many reports it has submitted, and the information becomes a matter of common knowledge, no such difficulty would be caused. In such a case, the FSA may disclose it, except what should not be disclosed, including personal information.
When requested to disclose any administrative document, the FSA will make an appropriate decision according to the Information Disclosure Act. At the same time, using the information we obtain from reports of irregularities and other sources, we will also carry out strict and appropriate supervision of insurers and other entities from the viewpoint of policyholder protection.
That is the position the FSA stands on. As the head of the FSA, I share the policy.

Q.

Do you mean some of the listed insurers may behave in an uncooperative manner towards the FSA and may hide some information, for instance, when disclosing the number of submitted reports instead of information contained? Do you think so yourself?

A.

If the number of submitted irregularity reports is disclosed, the details of various irregularities may not be clear. Despite the fact that some are material and others are not, there might be some who place the focus solely on the number itself, and, when finding an insurer that has submitted more reports than others, make guesses about possible problems in their management and control and their state of business. They might speculate that insurers who have submitted more reports than others must have some problems. Then, the former might be placed at a disadvantage in competition. That is why the FSA refrains from disclosing the information and what I understand.
A report of irregularity contains a summary of the findings from a voluntary investigation the reporting insurer carried out into the case, analyses they performed to examine why and how the irregularities were allowed to take place, and matters they need to reform, some of which they decline to make public. If it is disclosed, their internal information is revealed, such as the scheme for business management and administration, the system for business operation, and details of the policy for the action they are going to take for the case. That would infringe their rights and interests, such as their competitive position. Therefore, the FSA declines disclosure of the information. That is what I understand.
Anyway, what is critical for socially responsible businesses is that they must make a correct and substantial report. That is what the current practices stand on. I understand it as such.

Q.

You mean the parties concerned must face up more squarely to their responsibility to policyholders when they consider disclosing any information. Is that right?

A.

They must make clear all the facts. That is critical, I believe.